Masterplast - In healthcare we trust
Masterplast announced yesterday that it will start another project in Hungary. The value of the project will be HUF 2.6 bln, financed by 80% subsidy of the HU state under the title Investment subsidy for the production of products relevant to COVID19. The new capacity aims to provide medical suits, foot bags, head protection and isolation sheets.
The expected labor employment will be 40 people and production could start as early as 2021 September.
According to company expectations, the EBITDA margin of the new products and sales could reach 30% and EUR 22 mln gradually.
The value of the project based on the Co. and our assumptions could yield as much as HUF 931 (excluding the 15% liquidity discount) to shareholders, but Masterplast already partially included the project in its figures, though we do not know how much contribution the Co expected previously. We have incorporated roughly 50% of the project value as an addition to our TP but we have not included in our earnings forecast yet. As we emphasized before, execution is key in both earnings and consequently in the share price as well.
We lift our TP to HUF 3,540 and maintain our Buy recommendation.
Masterplast Nyrt is a Hungary-based company active in construction sector. The company is a producer and distributor of construction industry products. Its product portfolio includes facade insulation systems and components, roofing underlay and roofing accessories, bituminous corrugated sheets and shingles, thermal-sound and water insulation materials, dry construction elements, as well as plaster profiles and accessories, polypropylene foils and bags and foam tapes. It has two production plants, based in Kal, Hungary and Subotica, Serbia.The Company sells its products domesticaly and exports it to Estonia, France, Greece, the Netherlands, Italy, Latvia, Lithuania, the Russian Federation, Sloveania and Turkey.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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